Q:

Hi Scott,

I (a New York State Resident) have contributed $12,000 to my child’s NY 529 in 2024).  I have set a $1,000 a month automatic contribution.   I am concerned that I put too much in, as I know you recommended that I contributed $10,000 previously.  What should I do with the extra $2,000?  Should I withdraw it?

A:

Hi Jane Doe,

For your child’s 529, there is no penalty or negative consequence for contributing $12,000 for 2024.  We just generally recommend to contribute up to $10,000 ($5,000 for a single or unmarried owner) if possible annually, as a married filing jointly New York State tax payer you are eligible to receive a NY state annual tax deduction that caps at $10,000 (the remaining $2,000 will not be eligible for NY tax deduction but the investment can still grow tax free if used for qualified education), so you are good to go.

Best,

Scott

All questions are real questions, but for confidentiality reasons are re-written.  They are not intended as individualized advice.